Methodology · City figures as of 23 Oct 2026

How the calculator works

A salary tells you what an employer pays. It doesn’t tell you what you keep, or how many hours of your week the job really takes. The Real Wage Calculator puts both into one number: what a job pays for each hour you actually give it. This page explains how that number is worked out, what it leaves out, and where the city figures come from.

The formula

Real hourly wage = annual net income ÷ annual hours invested

Both parts are counted over a 52-week year.

Annual net income

Start with the gross salary and subtract three things:

• Tax. One effective rate, applied to the whole gross salary. For the city presets, this rate was worked out from each place’s 2026 income tax brackets and payroll contributions at the typical local salary.
• Commuting and parking. The daily cost, multiplied by the number of days you travel to work each week, multiplied by 52.
• Other job costs. Money you spend only because of the job, such as lunches out, work clothes or extra childcare, entered per week and multiplied by 52.

Annual hours invested

• Contract hours: the hours you’re paid for each week, × 52.
• Unpaid overtime: the hours you work beyond them, × 52.
• Commuting: round-trip minutes ÷ 60 × office days a week × 52.

Unpaid overtime and commuting together are what the calculator calls the time tax: hours the job takes but doesn’t pay for.

A worked example

Take a job in New York paying $86,310 for 40 hours a week, commuting five days a week by subway.

• Tax at 27.5% takes $23,735.
• Two subway fares a day come to $1,560 a year, and everyday office spending, estimated at $60 a week, adds $3,120.
• That leaves a net income of $57,895.
• The job takes 2,080 hours of paid work plus 442 hours of commuting: 2,522 hours in all.

$57,895 ÷ 2,522 hours = $22.96 an hour, against the $41.50 the salary works out to on paper.

What the calculator leaves out

A single number can’t capture everything about a job. These are the simplifications to keep in mind:

• Tax is one flat rate. Real tax systems are progressive, so a raise is taxed at more than your average rate. You can set the rate yourself if you know your own.
• Benefits aren’t counted separately. Pension matching, health insurance, bonuses and equity can be worth a lot. If you can put a cash value on them, add it to the salary.
• Every week counts the same. Hours and commuting are spread over 52 weeks. Paid holidays mean you work fewer weeks than that, so the result slightly understates pay per hour actually worked, for every job alike.
• City figures are averages. Your own commute, fares and parking may be very different. Every preset value can be changed under “Fine-tune every number”.
• Money isn’t everything. Career growth, the people you work with, security and how much you enjoy the work all matter. The real hourly wage is one input to a decision, not the decision.

Where the city figures come from

Each city preset stores only published inputs, each with its source, and the calculator derives everything else from them:

• Salaries: mean annual wages from the U.S. Bureau of Labor Statistics (May 2025), average weekly earnings from Statistics Canada, and median full-time pay from the UK Office for National Statistics.
• Tax: 2026 federal, state or provincial, and city income tax rules plus payroll contributions, applied to the typical local salary.
• Transit fares: each agency’s published fares for two trips a day, with daily caps where they apply.
• Commute times: average one-way journeys from Moovit’s 2024 public transport report, the U.S. Census Bureau’s American Community Survey, Statistics Canada and TomTom, doubled for the round trip.
• Driving costs: local fuel prices for a 14.4-mile trip each way (the average U.S. car commute) at 27.2 miles per gallon (the EPA’s real-world average), plus tolls or congestion charges where they apply.
• Parking: typical monthly rates divided by the 21.7 workdays in an average month, or weekly rates divided by five.

Some figures are weaker than others, and the city pages say so where it applies. Chicago and Austin use the U.S. average transit commute because no city-specific figure was found, and Vancouver’s parking rate comes from current listings rather than a survey. Every source is linked on its city page and in the calculator’s Sources section.

Keeping figures current

City figures were collected on 23 Oct 2026, and that date appears wherever they’re used. Prices such as fuel change often, so treat them as a starting point and replace them with your own numbers when you know them.

Your numbers stay with you

The calculator runs entirely in your browser. What you type is kept in your browser’s local storage so it’s there next time, and it isn’t sent to us. The privacy policy has the details.

Spotted a mistake?

If a figure is wrong or out of date, please tell us, ideally with a link to the source.